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OSC, HHS's Sebelius at odds over Hatch Act violation

The Office of Special Counsel and the Department of Health and Human Services
are at odds over whether Secretary Kathleen Sebelius violated the Hatch Act.

OSC Special Counsel Carolyn Lerner said in a letter to President Barack Obama that
Sebelius's comments during a Feb. 25, 2012 speech broke the law prohibiting federal employees from engaging in
partisan actions. OSC Sebelius spoke in her official capacity as HHS Secretary at
the Human Rights Campaign Gala. Political appointees speaking in their official
capacity cannot make partisan comments. Political appointee speaking in a personal
capacity are allowed to make partisan remarks.

During her speech, OSC stated in a report to President Barack
Obama that Sebelius advocated the President's reelection and the election of Lt.
Governor Walter Dalton as the next governor of North Carolina.

But Sebelius disagrees with OSC's findings, saying she reclassified the speech as
a political event, which political appointees are allowed to attend, after making
the remarks. The Obama Presidential campaign reimbursed the Treasury Department
for any travel costs.

"I believe that you should have concluded that any violation was corrected when
the event was reclassified as political, just as you concluded that any potential
violation of Section 7324 (b) was corrected when the U.S. Treasury was reimbursed
for the expenses of the trip," Sebelius wrote in response to the OSC report.

Sebelius went 'off script'

Lerner stated everything about the trip up until Sebelius went "off script" and
reclassified the trip amounted to her acting in her official HHS Secretary
capacity.

"Secretary Sebelius then presented her prepared remarks, which focused on the
administration's policies," the report states. "She referred to the President's
then-recent State of the Union address and his framework for the economy. The
Secretary highlighted advances made by the Obama administration that benefitted
Lesbian-Gay-Bisexual and Transgender Americans."

Lerner said departure from her prepared remarks, advocating for Obama's re-
election and the election of Dalton, is where she crossed the line.

In an interview with OSC, Sebelius tried to clarify what happened.

"The Secretary explained that she did not know Mr. Dalton and did not intend to
endorse his candidacy," OSC stated Sebelius said during their investigation. "She
intended to recognize his presence, as she usually attempts to acknowledge key
attendees when she is at events. The Secretary had been told that Mr. Dalton was
in attendance, and he had declared his candidacy for Governor. Secretary Sebelius
explained that her 'shout out' came across 'as an endorsement.' She expressed
regret for the statements, particularly since there were 'other primary opponents
who were close by.' She further stated that she rescinded the endorsement."

As for the endorsement of the President, Sebelius told OSC she made "a mistake,
and "got a little caught up in the notion that the gains which had been made would
clearly not continue without the President's reelection."

Still, OSC concluded that Sebelius violated the Hatch Act.

White House says Sebelius has corrected problem

Sebelius said it's tough to separate the roles as she attends political and
official events often on the same day.

"Since the incident, I have met with the ethics attorneys at the department to
ensure that I have an accurate understanding of what types of statements are
prohibited at an official event," she wrote to OSC. "I appreciate the OSC has not
recommended to the President that any particular action be taken and I don't
believe that any action would be appropriate."

White House spokesman Eric Schultz said in an emailed statement that Sebelius took
the appropriate steps to fix the problems.

"This administration holds itself to the highest ethical standards, which is why
President Obama has installed the toughest ethics rules of any administration in
history — beginning on his first day in office when he signed an executive
order instituting unprecedented reforms," Schultz wrote.

Rep. Darrel Issa (R-Calif.), chairman of the Oversight and Government Reform
Committee, said in a release that OSC's findings show the importance of the Hatch
Act's safeguards against mixing government business with partisan politics.

"OSC has sent its findings to President Obama, who must now decide on appropriate
action," Issa said. "The committee awaits President Obama's decision. As he
decides the appropriate consequences for Secretary Sebelius, the President should
consider the important leadership role of cabinet secretaries and the example they
must set for the entire executive branch."

The only other instance in recent memory of a high-ranking political appointee
violating the law is when OSC found former General Services Administration
Administrator Lurita Doan violated the law in 2007 by asking GSA staff members to
help support candidates in an election.